By Hellen Reta 
Whether you need to cover an emergency expense or pay the bill for a large purchase, taking out a personal loan is an excellent option. It is a type of installment loan issued by a bank or credit union, giving borrowers a lump sum of money that they can pay back in regular, fixed payments over a certain period of time.
While the idea of acquiring a personal loan is not new, the process is more convenient than ever. You can now leverage online lenders and apply for personal loans from the comfort of your home or office.
Here’s a short guide explaining the benefits of applying for an online personal loan:
Convenient and Smooth Process
One of the biggest advantages of getting an online personal loan is convenience. You don’t need to travel to the bank, wait in line, and fill out lengthy loan forms. You can apply for a loan anytime, from anywhere with an internet connection.
The process itself is pretty straightforward. Once you find a reliable online lender, do the following:
- Prequalify online. Find a rate you qualify for in minutes.
- Choose your personal loan repayment term.
- Finish the online application.
- Receive your funds.
You can get more information from an online lender’s website – no need to travel to a brick-and-mortar branch.
Minimal Documentation
Since online personal loans offer convenience, lenders require minimal documentation. This can include:
- Proof of identity. This can be your government ID or driver’s license.
- Proof of income. This includes pay stubs, W-2 forms, or tax returns.
- Proof of address. You can verify your residential address through a utility bill or a mortgage statement.
Low Rates
Unlike physical banks, which have branches to maintain, online lenders have lower overhead costs. This is why the latter can afford to offer competitive interest rates.
For instance, SoFi offers personal loans with fixed rates as low as 8.74% APR for borrowers who qualify. Moreover, they don’t impose origination fees or prepayment penalties.
Same-Day Funding
Online personal loan lenders don’t make you sit through an exhaustingly long waiting period. Once your application is approved, you might receive funds in one to a few days. Some online lenders even offer same-day funding. If you need funds quickly, an online personal loan can be the best option.
Differing Credit Score Criteria
Traditional banks often impose strict credit score requirements that are difficult to meet. Online lenders are willing to consider factors beyond credit score. This flexibility and varying criteria can help you deal with a financial emergency.
No Collateral Required
Most online personal loans are unsecured, meaning you do not need to put up any assets (house or car) as collateral. Just make timely repayments to build a solid credit history over time.
Access to More Loan Products
Acquiring an online personal loan means choosing from a range of loan products. This includes:
- Business loans
- Car loans
- Home improvement loans
- Credit consolidation
- Travel and vacation loans
- Wedding loans
Explore different loan products and choose the one that best suits your needs.